2017 EBIT is $300,000 Here are the differences between book and tax income for 201... A) 2017...
Fantastic news! We've Found the answer you've been seeking!
Question:
2017 EBIT is $300,000 Here are the differences between book and tax income for 201...
A) | 2017 EBIT is | $300,000 | ||
Here are the differences between book and tax income for 2017 | ||||
Book | Tax | |||
Warranty Expense | 8,000 | 3,000 | ||
Gross Profit recognized on long-term contracts | 95,000 | 70,000 | ||
Depreciation expense | 50,000 | 70,000 | ||
Pollution fine paid | 3,000 | |||
Tax exempt Interest Income | 2,000 | |||
REQUIRED: | ||||
Compute taxable income | ||||
Compute deffered taxes for each temporary difference | ||||
Prepare the journal entry to record tax expense for 2017 | ||||
Draft the lower portion of the 2017 income statement starting with EBIT | ||||
B) | 2018 | $320,000 | ||
Here are the differences between book and tax income for 2018 | ||||
Book | Tax | |||
Warranty Expense | 5,000 | 7,000 | ||
Gross Profit recognized on long-term contracts | 80,000 | 70,000 | ||
Depreciation expense | 60,000 | 80,000 | ||
Tax exempt Interest Income | 2,500 | |||
REQUIRED: | ||||
Compute taxable income | ||||
Compute deffered taxes for each temporary difference | ||||
Prepare the journal entry to record tax expense for 2018 | ||||
Draft the lower portion of the 2018 income statement starting with EBIT | ||||
C) | ||||
Assume the tax rate changed to 30% in June of 2018 (for current and all future years) | ||||
REQUIRED | ||||
Compute taxable income | ||||
Compute deffered taxes for each temporary difference | ||||
Prepare the journal entry to record tax expense for 2018 | ||||
Draft the lower portion of the 2018 income statement starting with EBIT |
prepare answers to each of the questions (A, B, C)
Related Book For
Financial Accounting an introduction to concepts, methods and uses
ISBN: 978-0324789003
13th Edition
Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis
Posted Date: